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9 min read

Best California PEO Companies: Top Picks for Your Business Growth

Best California PEO Companies Top Picks for Your Business Growth
9 min read

Best California PEO Companies: Top Picks for Your Business Growth

California has become a hub for businesses looking to streamline their operations, particularly through the utilization of a California PEO. These companies offer a comprehensive suite of services, allowing California-based businesses to outsource crucial HR tasks, access better employee benefits, and ensure compliance with the complex array of state-specific labor laws.

Key Takeaways

  • PEOs are instrumental for California businesses in managing HR, benefits, and compliance.
  • The best PEOs offer customizable solutions and leverage technology for efficiency.
  • Selecting a suitable PEO involves evaluating service quality, cost, and client feedback.

Top 5 California PEO Providers

When selecting a California PEO, businesses benefit from a range of expertise in HR, payroll, and compliance. Each provider offers distinctive services suited to diverse business needs.

Our pick for the top 5 are: 

1. TriNet

TriNet is known for its comprehensive HR solutions that cater to small and midsize businesses. They specialize in tailoring packages to fit the unique needs of industries such as technology, finance, and non-profits.

💡 Read further on the TriNet PEO solution in our comprehensive review of TriNet’s services

2. ADP TotalSource

ADP TotalSource combines advanced HR technology with expert support, positioning itself as a partner for companies that want to improve employee management while navigating complex regulations.

💡 Learn more about ADP TotalSource in our detailed analysis of the ADP PEO solution

3. Infiniti HR

Specializing in customizable HR solutions, Infiniti HR offers services that adapt to the changing needs of dynamic and growth-oriented businesses. Infiniti HR is an excellent option for businesses in need of a flexible PEO solution. 

💡 Explore their services in greater detail in our 2023 Infiniti HR evaluation.

4. Paychex

Paychex PEO combines HR services with powerful technology to provide comprehensive support for employment-related issues, employee benefits, and compliance. Paychex has been rated one of the best PEOs in the world

💡 Read more in our detailed breakdown of the Paychex PEO solution

5. AlphaStaff

AlphaStaff tailors its HR solutions specifically to the needs of each business, providing expertise in employment, compliance, and employee benefits management.

💡 Learn more about how AlphaStaff can support your business in our comprehensive expert review of AlphaStaff.

Why California Businesses Choose PEOs

California businesses often seek out Professional Employer Organizations (PEOs) as a way of saving on HR and payroll costs, and to ensure full compliance with the law. 

PEOs appeal particularly to small businesses as they look to leverage external expertise in human resources, payroll, and regulatory compliance. Specifically, benefits of PEO services for California businesses include: 

  • Economies of Scale: PEOs offer small businesses access to employee benefits and health insurance options that would typically be out of reach due to cost. By pooling resources, PEOs help level the playing field.
  • Compliance Management: California’s regulatory environment can be complex. PEOs provide up-to-date knowledge of laws and regulations, thus protecting companies from potential non-compliance penalties.
  • Focus on Core Activities: With the administrative burden managed, businesses can focus on their core offerings, fostering growth within their specific business industries.
  • Recruitment and Retention: Attracting top talent is a priority, and PEOs equip businesses with competitive benefits packages, contributing positively to recruitment and retention strategies.

For a state with a thriving and competitive marketplace like California, partnering with a PEO is not just a convenience; it’s almost a strategic necessity for small and medium-sized businesses striving to thrive in a dynamic economic landscape.

Key Features of Top PEO Companies in California

When evaluating the best PEO companies in California, certain key features stand out:

  • Benefits Administration: These companies adeptly manage employee benefits, encompassing health insurance, retirement plans, and workers’ compensation.
  • HR Management: They provide extensive human resources management, ensuring that employee concerns and HR tasks are handled efficiently.
  • Payroll Processing: PEOs streamline payroll, handling everything from direct deposits to garnishments with precision.
  • Tax Administration: They assist in accurately managing payroll taxes and ensuring compliance with federal, state, and local tax regulations.
  • Compliance: A top PEO stays abreast of labor laws and regulations, helping your business adhere to the required standards and avoiding potential legal issues.
  • Technology: Utilizing advanced technology, these companies offer platforms for better HR information management and employee self-service portals.

Organizations typically seek a PEO with a proven track record of high-quality service and dependability across all areas mentioned. This ensures not only the growth of the business but also maintains employee satisfaction and compliance with regulations.

Leading California PEO Paychex Explains How PEOs Work

Comparing California PEO Costs: Price Structures and ROI

When evaluating California PEO companies, understanding their cost structures is essential for businesses aiming to maximize return on investment (ROI). PEO costs typically encompass HR costs, payroll taxes, workers’ compensation insurance, and benefit plan administration.

1. Price Structures

PEOs in California may offer two primary price structures: a percentage of payroll or a flat fee per employee. The percentage model aligns costs with payroll fluctuations, which can benefit companies with seasonal employees. Conversely, the flat-fee model favors businesses seeking predictable expenses. Both models should be scrutinized for potential hidden fees, such as setup and termination charges.

  • Percentage of Payroll: Usually ranges between 3% and 12%, depending on services.
  • Flat Fee: Typically $40 to $160 per employee per month.

2. Insurance Costs

Partnering with a PEO can lead to lower insurance costs due to their large group buying power. Companies should request a breakdown of costs for health insurance, workers’ compensation insurance, and other benefits to weigh against the PEO’s administrative fees.

3. ROI Considerations

The ROI from hiring a PEO extends beyond immediate cost savings: A PEO’s expertise in compliance and HR can reduce legal risks and staff turnover. Additionally, their streamlined benefit administration often improves employee satisfaction—a non-tangible yet valuable ROI.

By weighing up the costs of PEO services and the tangible and intangible returns, companies can make an educated decision aligning with their financial and strategic goals.

Selecting a PEO in California: The Criteria for Best Fit

When companies in California consider partnering with a Professional Employer Organization (PEO), they should consider the following:

1. Service Offerings

A top-tier PEO should provide a comprehensive suite of services, including payroll administration, human resources management, employee benefits, and compliance assistance. Businesses should assess whether the PEO’s offerings align with their requirements. 

2. Customer Reviews

Testimonials and feedback from current clients offer insight into a PEO’s operational competence. Positive reviews can be a strong indicator of reliability and can influence the selection process.

3. Customer Service

High-quality customer service is vital. Prospects should inquire about the PEO’s responsiveness, availability, and the ease of accessing support.

4. Ease of Use

The PEO’s systems should be user-friendly. Many California PEO companies leverage technology for a streamlined experience. Potential clients should test the software for intuitiveness and compatibility with their workflows.

5. California-Specific Expertise

With its unique employment laws, California businesses need a PEO that is knowledgeable about local regulations. The PEO should have a proven track record of helping companies navigate the complexities of California HR compliance.

By thoroughly examining these criteria, businesses can confidently partner with a PEO in California that meets their specific needs and supports their operational goals.

Industry-Specific Solutions: PEOs Catering to California’s Diverse Economy

California’s economy thrives on an array of sectors, from technology and entertainment to agricultureand manufacturing, cementing its status as a global powerhouse. Professional Employer Organizations (PEOs) in California offer tailored solutions to meet the distinctive requirements of these varied industries.

1. Healthcare

In the healthcare sector, PEOs offer compliance expertise with the ever-evolving state and federal regulations. They provide support for workplace safety and employee wellness programs, which are critical in this sector.

  • Compliance and Regulations: Ensuring adherence to HIPAA and other regulations
  • Employee Wellness: Customized programs for healthcare staff

2. Technology

The technology industry, home to Silicon Valley, demands a dynamic approach to HR to keep pace with its rapid growth.

  • Talent Acquisition: Access to top-tier tech talent
  • Flexible HR Solutions: To match the agility of tech companies

3. Manufacturing

For manufacturing, PEOs deliver strategic services to handle complex labor laws and safety protocols inherent to the industry.

  • Workplace Safety: Developing comprehensive OSHA-compliant safety programs
  • Workforce Management: Streamlining operations and employee onboarding

Across these industries, PEOs in California ensure businesses remain competitive by managing HR tasks, allowing companies to focus on core operations. They negotiate with carriers for better rates on healthcare and workers’ compensation insurance, significantly benefiting their clients. By offering robust infrastructure and technology platforms, they facilitate efficient payroll processing, tax administration, and risk management—all while adhering closely to California‘s stringent regulatory environment.

The Role of Technology in PEO Operations

Technology is instrumental in streamlining Professional Employer Organization (PEO) operations, ensuring they can offer efficient and sophisticated HR solutions. Central to these advancements are integrated software platforms that serve as the backbone for a range of essential services.

  • Payroll Automation: PEOs leverage technology to automate payroll processing, eliminating manual errors and reducing processing time. This automation extends to tax filings and benefits administration, thus enhancing the accuracy and reliability of the overall payroll system.
  • Time Tracking Systems: Integrating time tracking technology allows PEOs to accurately track employee hours, manage overtime, and ensure compliance with labor laws. These systems often tie directly into the payroll software, simplifying compensation calculations and billing processes.
  • HR Management Tools: Advanced technology places a wealth of HR resources at the fingertips of business clients. These tools can manage employee data, guide recruitment efforts, and streamline onboarding processes, resulting in improved HR solutions.
  • Employee Assistance Programs (EAP): Sophisticated platforms enable seamless administration of EAPs, connecting employees with support services and improving workforce well-being.
  • The inclusion of comprehensive IT support within PEO offerings guarantees that all these technology-driven services function smoothly. Businesses benefit not just from the HR services themselves, but from the reassurance that a dedicated IT team is safeguarding the interconnected systems against disruptions.
  • Robust data security measures are paramount. They ensure that sensitive employee information and company data remain secure, which is a crucial aspect of any PEO’s technological infrastructure.

In summary, technology plays a vital role in PEO operations, bolstering every aspect from payroll and time tracking to HR management and employee support programs. With these advancements, PEOs can deliver superior services with greater precision and reliability.

Understanding the Legal Framework: Co-Employment and California Regulations

In California, co-employment involves a unique legal framework that governs the relationship between a company (client), a Professional Employer Organization (PEO), and the employees. The concept of co-employment implies that both the PEO and the client company share certain legal responsibilities for the employees.

  • IRS and Taxes: When it comes to the Internal Revenue Service (IRS) and taxes, a PEO often assumes the responsibility for payroll taxes as a third-party payer. They are tasked with ensuring tax compliance, which is a key component of the co-employment arrangement. This shields client companies from potential tax-related liabilities.
  • Regulatory Compliance: California’s regulation landscape is intricate, and PEOs are instrumental in helping client businesses maintain compliance with state labor laws. Legal compliance is not only beneficial—it is mandatory, and lapses can lead to significant penalties.
  • Co-Employment Arrangement: The essence of the co-employment arrangement is notably characterized by the division of employer responsibilities. A PEO typically manages aspects such as payroll and benefits administration, whereas the client company maintains direct control over daily operations and management of employee work and performance.
  • Legal Implications in California: The implications of joint employer liability are pivotal, for they affect both parties in cases where employment law violations are alleged. Understanding and adhering to California’s specifications about co-employer obligations is paramount to both protect and delineate the rights and duties of each entity involved.

By navigating through these regulations with a clear understanding, businesses, PEOs, and employees can form a balanced relationship that upholds the standards set by the California regulatory framework while fostering a stable and thriving work environment.

The Process of Onboarding with a PEO

When a company partners with a Professional Employer Organization (PEO), the onboarding process is a critical phase. It involves transferring employee management tasks from the company to the PEO. This process is designed to be systematic and is tailored to maintain the integrity of all administrative and HR tasks.

Firstly, paperwork is handled extensively during onboarding. A PEO will typically collect employee data, tax forms, and legal documentation to ensure compliance. The paperwork process is often facilitated through digital systems, streamlining the submission and storage of documents.

Secondly, administrative tasks are meticulously managed by the PEO. They take charge of payroll processing, benefits administration, and compliance management, thereby unburdening the business of complex HR-related tasks.

As for employee leasing, the PEO becomes the official employer on record for tax purposes, although employees continue to work at the company’s direction. This arrangement allows for more efficient management of employee benefits and tax withholdings.

Training is another significant aspect addressed during the onboarding process. Many PEOs offer programs to bring employees up to speed with company policies, compliance requirements, and job-specific skills.

Recruitment processes can also be enhanced with a PEO’s expertise. They can assist in attracting and vetting candidates, ultimately streamlining the hiring phase.

To sum up the PEO process in each phase, consider the following table. 

Onboarding PhaseResponsibilities of the PEO
PaperworkCollecting and managing employee documents
Administrative TasksPayroll, benefits, compliance management
Employee LeasingEmployer on record for tax purposes
TrainingProviding necessary policy and skills training
RecruitmentEnhancing hiring processes


Through this streamlined approach, onboarding with a PEO not only simplifies employee management but also allows businesses to refocus their strategies on core activities.

Evaluating Client Support and Feedback for PEOs

When selecting a Professional Employer Organization (PEO) in California, assessing the quality of client support and feedback is crucial. Companies should look for PEOs with a solid reputation for providing excellent customer service. Customer support is a pivotal element of PEO services, as it directly impacts the management of human resources, payroll, and compliance issues.

  • Responsiveness: Clients expect timely responses to their inquiries. The ability for a PEO to quickly address concerns or issues is indicative of their commitment to service quality.
  • Expertise: Effective support teams are not just prompt but also knowledgeable. They should offer precise and helpful advice on a wide range of HR matters.

The assessment of customer service should include an evaluation of its accessibility. Can clients reach the support team through multiple channels such as phone, email, or chat? Is support available 24/7, or are there specified hours?

Customer reviews and feedback can offer insights into the user experience with a particular PEO. Positive reviews often highlight personalized service and the PEO’s ability to provide solutions tailored to specific business needs. Negative reviews, conversely, can reveal areas where the PEO may need to improve.

Customer Feedback ComponentsImportance
Timeliness of SupportHigh
Expertise and KnowledgeVery High
Accessibility of ServiceHigh
Problem-Solving AbilitiesHigh

Companies are advised to analyze such feedback in conjunction with their own unique requirements to make an informed choice about the PEO services that best align with their operational standards and values.

Frequently Asked Questions

Small businesses in California often turn to Justworks for a PEO that prioritizes simplicity and cost-effective PEO services. 

Businesses looking for robust health insurance options may find TriNet a strong candidate due to its access to extensive carrier networks and customizable plans.

Startups in California benefit from PEOs through cost savings on employee benefits and reduced overhead by outsourcing HR tasks. PEOs like Justworks also offer scalability for growing startups.

The top players in the California PEO market include ADP TotalSource, Trinet, Justworks, Paychex and Infiniti HR. 

Partnership with a PEO in California can lead to less control over company benefits and potential service costs that might not align with a business's financial strategies.

International PEO services like Papaya Global specialize in managing a global workforce, whereas local California PEOs may offer more tailored solutions for state-specific regulations and labor laws.

Article By
Managing Editor
Milly is an international lawyer and tech entrepreneur who has advised companies on expanding globally for over 5 years. She is an advocate of remote hiring and regularly consults on future of work matters. Milly founded RemotePad to help employers learn more about building and growing international teams.